The fate of Europe’s auto industry supplier parks depends on original equipment manufacturers but will also be affected by the auto giants’ production strategies, writes Lillie Guyer.
As the auto industry retrenches in Europe and North America with job cuts, downsizing and plant closings, the supplier parks question also hangs in the balance. Supplier parks are clusters of suppliers located close to assembly plants to provide just-in-time supply and in-line sequence of parts and subassemblies directly to the automaker production line. The question is whether there is growth or are the industrial parks in maintenance mode, given market conditions in mature economies such as Germany and the US?
“Growth only comes when additional capacity is added, and that’s mainly in eastern Europe now, especially Russia,” says Pieter Donck, director of Agoria Automotive, a 240-member supplier trade association in Belgium. Agoria is part of CLEPA, a 1400-member European supplier association.
Supplier investment in the Belgian automotive sector was estimated at €503m in 2006, falling 10.2% compared to 2005, according to Jean-Benoît Charles, economist at Agoria Automotive in Brussels. Initial forecasts indicate a further decrease for this year of about 3%, he notes.
Employment of the sector was 52,843 in 2006 (up 1.2% on 2005). “Due to the important downsizing of car assembly, employment is expected to drop by 10% in 2007,” says Mr Charles.
Still, movement of suppliers into industrial parks in Europe has not stopped. According to Mr Donck: “The assembly industry is not going away.”
The assembly-intensive Flanders region of Belgium is a macrocosm of global supplier park activity and concerns. The region turns out about one million cars a year. There are Ford, General Motors, Volvo and Volkswagen plants within a 40-mile radius. In Belgium, reorganisation is taking place as new vehicle programmes enter or leave assembly plants.
